Some Possible Logic Behind The KMR-KMP Yield Spread

While KMR and KMP have both proved to be highly lucrative investments for unit-holders, the persistent yield/price spread between the two has led some to suggest KMR is a better value, and even further that this spread should eventually close, implying greater potential upside for KMR.A bit of background. KMP and KMR represent partnership units in Kinder Morgan Energy Partners. KMP is a traditional MLP vehicle (meaning you get a K-1 come tax time) that pays cash "distributions" to individuals. KMR is identical in ownership rights and distribution amounts to KMP, except it is structured as an "I-share," which pays distributions as fractional shares - in other words, KMR DRIPs for you automatically. KMR unit-holders do not receive K-1 forms, and KMR shares are better suited for some retirement accounts.Now to the question at hand. In theory, KMR and KMP should trade at par, yet there has beenComplete Story »

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By MLP Trader:Over two years ago, I wrote this article about how to trade the spread between the Kinder Morgan Energy L.P. (KMP) and Kinder Morgan Management (KMR). For review, KMP units are conventional limited partnership units that pay cash distributions.

By Mike Maher:Continuing the dissection of the Alerian MLP Index, the second largest holding in the index is Kinder Morgan Energy Partners LP (KMP), making up 10.2% of AMZ. Kinder Morgan is really a family of companies, with a publicly traded GP, Kinder Morgan Inc. (KMI), and a sister company, KMR, that pays distributions in new units.

ByAlbert Alfonso:It continues to be an enigma for me as to why Kinder Morgan Management, LLC (KMR) trades at discount to Kinder Morgan Energy Partners (KMP). KMR shares are for all intents and purposes similar to KMP units. Yet, they seem to always trade at a discount to KMP. This discount can sometimes be as large as 10%.

By Tim Plaehn: The pipeline MLP, Kinder Morgan Energy Partners L.P. (KMP) has been a great, growing income producer for investors since going public 20 years ago. The distributions paid by KMP have increased steadily and have never declined.

Top U.S. pipeline company Kinder Morgan Inc said on Sunday it will put all its publicly traded units under one roof in a US$70 billion deal that responds to investor concerns about its growth prospects and complicated financial structure.
The oil and gas pipeline company said it would shed the tax-advantaged legal structure it had popularized during the U.S. shale boom, the Master Limited Partnership (MLP), and fold its units into one company with a market capitalization of US$92 billion organized as a C-corporation.